4.1. SR 10-09-2000
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City of 1Y
Elk
Item # 4.1.
MEMORANDUM
TO:
Mayor and City Council
FROM:
Pat Klaers, City Ad~ator
October 9, 2000 ~
DATE:
SUBJECT: Tax Rate Increase
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A new state law was adopted in 1999, which requires municipalities to hold a
public hearing and to pass a resolution if their tax levy will result in a tax rate
increase. This will be the case for Elk River in 2001. Accordingly, the city's
public hearing on the proposed tax rate increase is scheduled for this Monday.
The tax system is complex and often confusing terms are used. The state
legislature wants accountability at the local government level and does not
want cities to "play games" with technical terms. It is not unusual for a city (or
county) to say "if your property value did not change...then you will see no
change or only a modest increase in our share of your tax bill." This type of
statement has resulted in some frustrations at the state legislature because, if
a municipality or county is experiencing growth, then the municipality or
county is usually receiving additional tax revenues without this being clearly
stated. Additionally, in Elk River this isn't really a fair statement because
every other year or so the business or homeowner usually sees an increase in
their property value (and as a result their taxes usually go up).
This public hearing is another state legislature requirement for cities to
discuss taxes. Additionally, the state has created another complex tax formula
to determine if a city will have a tax rate increase. Please see the League of
Minnesota Cities attachment for information on this new law and tax formula.
For a growing city like Elk River, this new formula will typically result in
showing a tax rate increase.
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At the October 9, 2000, City Council meeting the Mayor should open the public
hearing on the tax rate. Staff can answer questions on the tax rate, the
13065 Orono Parkway. P.O. Box 490. Elk River, MN 55330. TDD & Phone (763) 441-7420. Fax (763) 441-7425
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proposed budget, and why additional tax revenues are being requested.
Following the closure of the public hearing, the City Council is requested to
adopt the attached resolution as prepared by the finance director.
Action Reauested
Following a public hearing the City Council is requested to adopt the attached
tax rate increase resolution.
Attachments
. Tax Rate Resolution
. League of Minnesota Cities Tax Rate Certification Information Page
. Levy Certification Tax Rate Worksheet
. Budget Information
o 2001 Sources of Funds
o 2001 Expenditures
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RESOLUTION 00-_
A RESOLUTION FOR THE CITY OF ELK RIVER
A RESOLUTION APPROVING A TAX RATE INCREASE FOR THE
2000 TAX LEVY, COLLECTffiLE IN 2001
WHEREAS, the City Council of the City of Elk River has reviewed the 2000
tax levy for taxes payable in 2001 and determined that a tax
rate increase is necessary.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of
Elk River as follows: The City Council of the City of Elk River proposes that
the Sherburne County Auditor is authorized to fix a property tax rate for
taxes payable in 2001 that is higher than the tax rate calculated pursuant to
Minnesota Statutes 275.078 for the City for taxes levied in 1999, payable in
2000.
BE IT FURTHER RESOLVED that the adoption of this resolution does not
prohibit the City from certifying a final levy that will result in no tax rate
increase or a tax rate decrease.
. Passed and adopted by the City Council of the City of Elk River, Minnesota
this 9th day of October, 2000.
Stephanie A. Klinzing, Mayor
ATTEST:
Sandra A. Peine, City Clerk
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s: \document \ resoluti \ OOtaxlev .doc
c. Tax rate certification
Minn. Stat S
204B.13S, subd.
S
A law passed in 1999 requires that all cities over 500 population and all
counties must pass a resolution if the levy for the subsequent year will result in a
tax rate increase. The provision is based on a Missouri law and was passed by
the Minnesota Legislature in response to concerns that cities and counties--were
claiming they were freezing taxes when, in fact, the levy was increasing but
being offset by tax base growth.
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Under the law, the county auditor is required to provide information to affected
cities and the county board that will allow the local government to calculate
what its tax rate would be in the coming year if the levy was held constant.
Essentially, a baseline 'tax rate is computed based on the prior year's levy and
.. the current year tax base. The county auditor is required to provide this
information by October I of each year.
A sample
resolution can be
found in
Appendix J
The city Council or county board must adopt a resolution at a public hearing if its
levy will result in an increase in the tax rate over the baseline tax rate. The
resolution must be filed with the county auditor by October 20 of each year. If a
city or county fails to file this resolution by October 20, the county auditor is
prohibited from spreading a levy that would result in a higher tax rate, unless the
increased rate is due to either a change in the general obligation debt levy or a
reduction in tax capacity due to a classification change, property exemption,
court judgment, or county error. The levy and tax rate are adjusted to exclude
levy for general obligation bonds and fiscal disparities, if applicable.
If a city files the resolution, it may still certify a final levy that results in a
constant or decreased tax rate. It may therefore be prudent to file the resolution
by the Octo bet 20 deadline if your preliminary levy would cause a tax rate
increase even if you plan to certify a lower final levy in December.
Selecting
20
;!~ f 11;,1/ ~. (I,'f/ Ift..lkf)
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Sherburne County
AUDITORITREASURER
Levy Certification Tax Rate RAMONA DOEBLER
Taxes Pavable in 2001
A calculation of the "levy certification tax rate" fort.Li:. !?~~/1.) , Minnesota,
as required by 1999 laws of the State of Minnesota.
Payable 2000
1. Certified Net Tax Capacity Levy
~ or, QG ~ J . Q
_ .5, I /0 b 7
2. Certified Referendum Mkt Value Levy $ -0 - I
3. Total Certified Levy (1 +2)
$ ..:<: 99,S-, Vb'?
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4. Certified Levy for G. O. Bonds
$ ;r;LjcQt/f
5. Total Certified Non-Debt Levy (3-4) $5, t31. ~/
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6. Payable 2001 Fiscal Disparity Dist Tax $ J J.4
7. Total Fis Disp Adj Non-Debt Levy(5-6) $ 3; ! 3;, ,;);) J
8. Payable 2001 HACA Net Tax
Capacity Adjustment $ /0 of?
9. Payable 2001 HACA Fi~cal
. Disparity Adjustment $ jJ / If
10. "Net Levy" (7 -R-9)
$ S;3~ //3
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11. Payable 2001 Taxable Net Tax Capacity $ (4;5"rt11?
12. Levy Certification Tax Rate (10:- 11)
'C>('? ~. ;) ~ %
day of i:-l7r
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Dated at Elk River, Minnesota, this tjfll
L -ilL
.~'l1D--- ,f. 'Lr!..z"c
Sherburne County Auditor/Treasurer~.
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Pavable 2001
$ ~} 4511 6l.l17
$ - 'D
$ 4 Lj 57 cl.J../l
I I
$ q~ <lll
I
$ L.I. 3 t;" <& I 3~ l..,
$ iJ /4
$4 3~ ~3~
. ,
$ ;..1 /4
$ /J J A-
$ ~ 3'!:'-~ 3~LP
1 .'
$ / <-} s i9. IF) 4,
.;;J.9,f7 %
,2000.
13880 Highway 10
Elk River, MN 55330-4601
612-241-28630 1-800-438-05760 Fax: 612-241-2875
. SOURCE OF FUNDS
1998 1999 2000 2001
ACTUAL ACTUAL ADOPTED PROPOSED
TAXES $ 2,681,221 $ 3,114,711 $ 3,356,100 $ 3,835,850
INTERGOVERNMENTAL REVENUES 1,067,237 1,047,623 1,016,100 1,118,150
CHARGES FOR SERVICES 516,794 491 ,198 482,400 482,800
FINES AND FORFEITS 115,753 117,614 115,700 119,500
LICENSES & PERMITS 540,826 511,307 478,100 486,750
OTHER REVENUES 123,010 76,184 92,700 102,700
TRANSFERS 295,000 309,800 321,400 324,250
TOTAL $5,339,841 $5,668,437 $5,862,500 $6,470,000
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APPROPRIATIONS SUMMARY
. 1998 1999 2000 2001
Actual Actual Adopted Proposed
MAYOR & COUNCIL $ 77,701 $ 92,383 $ 81,900 $ 150,400
CABLE TV 6,232 10,940 24,000 53,950
ADMINISTRATION 284,199 301,982 312,000 312,750
ELECTIONS 19,913 14,218 29,700 9,000
FINANCE 294,197 285,699 298,950 332,950
ECONOMIC DEVELOPMENT 35,984 32,766 46,350 25,800
LEGAL 77 ,232 72,394 72,600 75,000
ENERGY CITY 15,854 8,018 20,300 32,150
PLANNING 163,774 204,91 t 230,500 248,600
PLANNING COMMISSION 6,331 2,199 7,400 7,400
GOVERNMENT BUILDINGS 105,685 81,652 88,750 137,300
CONTINGENCY 40,686 35,088 130,000 130,000
BUILDING & ENVIRONMENTAL 379,917 406,015 447,550 474,300
. POLICE 2,074,041 2,052,912 2,150,600 2,360,000
POLICE RESERVE 24,292 16,740 29,150 38,550
FIRE 277,969 284,914 327,650 353,800
EMERGENCY PREPAREDNESS 17,088 25,085 15,850 17,800
STREETS 523,514 518,504 577 ,600 597,200
EQUIPMENT SERVICES 155,779 155,446 156,450 208,650
SNOW REMOVAL 53,529 74,010 160,750 175,850
ENGINEERING 34,775 64,677 42,000 45,000
SHADE TREE 10,160 6,645 7,950 9,250
PARKS 197,382 245,138 230,150 254,400
RECREATION 216,824 198,189 224,500 239,500
SR. CITIZEN PROGRAMS 43,342 50,630 62,250 65,300
TRANSFERS 254,710 87,600 87,600 115,100
TOTAL EXPENDITURES $ 5,391,110 $ 5,328,762 $ 5,862,500 $ 6,470,000
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